United Parcel Service Inc., the world’s largest package-shipping company, will increase the cost for ground and air deliveries by an average of 4.9 percent on Jan. 1.
Prices will rise 6.9 percent while a fuel surcharge will decline 2 percent, the Atlanta-based company said in a statement today. The new rates will be posted on UPS’s Web site on Dec. 1.
UPS is joining FedEx Corp. and other shipping companies in boosting rates to blunt higher spending on labor, equipment and infrastructure. Memphis, Tennessee-based FedEx said this month it will increase 2007 U.S. air shipment rates by 5.5 percent.
“UPS is saying the economy will remain robust through 2007 and that their rate increase will be absorbed,” said Jim Corridore, a New York-based analyst with Standard & Poor’s. He rates the shares as “buy” and lifted his 12-month price target by $10 to $95. He also has a “strong buy” on FedEx.
Shares of UPS climbed 73 cents to $79.31 at 11:31 a.m. in New York Stock Exchange composite trading. The stock has gained 5.6 percent this year.
UPS raised its 2006 rates for air and international deliveries by 5.5 percent and ground shipments by 3.9 percent.
